EXHIBIT 10.22
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO
RULE 144 OR RULE 144A OF SUCH ACT.
HEALTHEON CORPORATION
SERIES B PREFERRED STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received ________ ("Holder"), is entitled to
purchase up to ________ shares of Series B Preferred Stock (the "Shares") of
HEALTHEON CORPORATION, a Delaware corporation (the "Company"), subject to the
terms and conditions of this Warrant set forth herein, at an exercise price
per share of two dollars ($2.00) (the "Warrant Price"), as adjusted from
time-to-time pursuant to Section 3 below.
1. TERM. The purchase right represented by this Warrant is
exercisable, in whole or in part, only during the period (the "Exercise
Period") commencing on July 1, 1997 and expiring automatically on June 30,
2002.
2. METHOD OF EXERCISE AND PAYMENT.
(a) METHOD OF EXERCISE. Subject to Section I hereof and compliance
with all applicable federal and state securities laws, the purchase right
represented by this Warrant only may be exercised, in whole or in part, by
the Holder by (i) surrender of this Warrant and delivery of the Notice of
Exercise (the form of which is attached hereto as Exhibit A), duly executed,
at the principal office of the Company during the Exercise Period and (ii)
payment to the Company during the Exercise Period of an amount equal to the
product of the then applicable Warrant Price multiplied by the number of
Shares then being purchased pursuant to one of the payment methods permitted
under Section 2(b) (or as set forth below in Section 2(c)).
(b) METHOD OF PAYMENT. Payment shall be made by: (1) check drawn on
a United States bank and for United States funds made payable to the Company,
(2) wire transfer of United States funds to the account of the Company, (3)
cancellation of indebtedness of the Company, or (4) any combination of the
foregoing at the option of the Holder.
(c) NET ISSUE EXERCISE. In lieu of paying the aggregate Warrant
Price for the Shares by one of the payment methods specified in Section 2(b)
above, the Holder may elect to receive Shares equal to the value of this
Wan-ant (or the portion thereof being canceled) by surrender of this Warrant
at the principal office of the Company together with notice of such election,
in which event the Company shall issue to the Holder a number of shares of
the Company's Series B Preferred Stock computed using the following formula:
Y (A - B)
X = ----------
A
Where X = the number of shares of Series B Preferred Stock to be issued to
Holder.
Y = the number of shares of Series B Preferred Stock purchasable under
this Warrant.
A = the fair market value of one share of the Company's Series B Preferred
Stock (at the date of calculation).
B = Warrant Price (as adjusted to the date of such calculations).
For the purposes of the above calculation, the fair market value of
the Series B Preferred Stock shall mean with respect to each share of Series
B Preferred Stock:
(i) the product of (x) the number of shares of Common Stock
into which each share of Series B Preferred Stock is convertible at the time
of exercise and (y) the average of the closing bid and asked prices of the
Company's Common Stock quoted in the Over-The-Counter Market Summary or the
closing price quoted on any exchange on which the Common Stock is listed,
whichever is applicable, as published in the Western Edition of the WALL
STREET JOURNAL for the ten trading days prior to the date of determination of
fair market value; or
(ii) if the Company's Common Stock is not traded
Over-The-Counter or on an exchange, fair market value of each share of the
Series B Preferred Stock shall be determined in good faith by the Company's
Board of Directors. Receipt and acknowledgment of this Warrant by the Holder
shall be deemed to be an acknowledgment and acceptance of any such fair
market value determination by the Company's Board of Directors as the final
and binding determination of such value for purposes of this Warrant.
(d) DELIVERY OF CERTIFICATE. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be delivered to the Holder within thirty (30) days of
delivery of the Notice of Exercise and, unless this Warrant has been fully
exercised or has expired, a new warrant representing the portion of the
Shares with respect to which this Warrant shall not then have been exercised
shall also be issued to the Holder within such thirty (30) day period.
(e) NO FRACTIONAL SHARES. No fractional Shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional Shares
the Company shall make a cash payment therefor upon the basis of the fair
market value per Share as of the date of exercise (as determined above).
3. ADJUSTMENTS. The number and kind of securities issuable upon the
exercise of this Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the occurrence of certain events, as follows:
(a) REORGANIZATION, CONSOLIDATION OR MERGER. In the case of any
reorganization, consolidation or merger of the Company (including, without
limitation, any change of control transaction whereby immediately following
such transaction or series of transactions 50% or more of the Company's
outstanding capital stock is held by new stockholders) with or into another
corporation, the Company, or such successor entity, as the case may be, shall
execute a new warrant providing that the Holder shall have the right to
exercise such new warrant and, upon such exercise. to receive, in lieu of
each Share issuable upon exercise of this Warrant, the number and kind of
shares of stock, other securities, money or property receivable upon such
reorganization, consolidation or merger by a holder of the number of Shares
then purchasable with this Warrant. Such new warrant shall contain
provisions relating to the rights and obligations of the Holder and the
Company after such reorganization, consolidation or merger that shall have,
as nearly as possible after appropriate adjustment, the same effect as the
provisions of this Warrant, including the provisions of this Warrant relating
to the exercise price and number and type of shares of stock deliverable upon
exercise.
(b) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the Company at
any time while this Warrant remains outstanding and unexpired shall split,
subdivide or combine its authorized stock that is of the
2
same class and/or series as the Shares, the Warrant Price shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination. Any adjustment under
this subsection (b) shall become effective at the close of business on the
date the split, subdivision or combination becomes effective.
(c) STOCK DIVIDENDS. If the Company at any time while this Warrant
remains outstanding and unexpired shall pay a stock dividend with respect to
the shares of stock of the same class and/or series as the Shares, or make
any other distribution with respect to such shares (except any distribution
specifically provided for in Sections 3(a) or 3(b) above) of similar shares,
the Warrant Price shall be adjusted, from and after the date of determination
of the stockholders entitled to receive such dividend or distribution, to
that price determined by multiplying the Warrant Price in effect immediately
prior to such date of determination by a fraction (i) the numerator of which
shall be the total number of the shares of stock of the same class and/or
series as the Shares outstanding immediately prior to such dividend or
distribution, and (ii) the denominator of which shall be the total number of
such shares outstanding immediately after such dividend or distribution. Any
adjustment under this subsection (c) shall become effective at the close of
business on the date such stock dividend becomes effective.
(d) RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. If the Shares
issuable upon exercise of this Warrant shall be changed into the same or a
different number of shares of any other class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than a split,
subdivision or combination of the Shares pursuant to Section 3(b)), the
Holder shall, upon exercise of this Warrant, be entitled to purchase, in lieu
of the shares which the Holder would have been entitled to purchase but for
such change, the number and kind of shares of stock receivable upon such
reclassification, exchange or substitution by a holder of shares of the
shares of stock of the same class and/or series as the Shares.
4. NOTICE OF ADJUSTMENTS. Whenever the number or kind of Shares or the
Warrant Price shall be adjusted pursuant to Section 3 hereof, the Company
shall mail to the Holder, at least ten (10) days prior to the event requiring
such adjustment, a notice setting forth, in reasonable detail, the event
requiring the adjustment, and, within thirty (30) days after any such
adjustment, the Company shall issue a certificate signed by its Chief
Financial Officer setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated and the number or kind of shares or the Warrant
Price or Warrant Prices after giving effect to such adjustment, and shall
cause a copy of such certificate to be delivered to the Holder.
5. COMPANY'S REPRESENTATIONS. All Shares which may be issued upon the
exercise of the purchase right represented by this Warrant shall, upon
issuance in accordance with this Warrant, be duly authorized, validly issued,
fully paid and nonassessable, and free of any liens and encumbrances except
for restrictions on transfer provided for herein or under applicable federal
and state securities laws. During the Exercise Period, the Company shall at
all times have authorized, and reserved for the purpose of issuance upon
exercise right represented by this Warrant, a sufficient number of shares of
Series B Preferred Stock to provide for the exercise of the purchase right
represented by this Warrant.
6. COMPLIANCE WITH SECURITIES ACT; TRANSFERABILITY AND NEGOTIABILITY
OF WARRANT; DISPOSITION OF SHARES.
(a) COMPLIANCE WITH SECURITIES ACT. The Holder, by acceptance
hereof, agrees that this Warrant and the Shares to be issued upon the
exercise hereof are being acquired solely for its own account and not as a
nominee for any other party and not with a view toward the resale or
distribution thereof and that it will not offer, sell or otherwise dispose of
this Warrant or any Shares to be issued upon the exercise hereof except under
circumstances which will not result in a violation of the Securities Act of
1933, as amended (the
3
"Securities Act"). Upon the exercise of this Warrant, the Holder shall
confirm in writing, in a form reasonably satisfactory to the Company, that
the Shares so issued are being acquired solely for its own account and not as
a nominee for any other party and not with a view toward resale or
distribution thereto. This Warrant and the Shares to be issued upon the
exercise hereof (unless registered under the Act) shall be imprinted with a
legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO T14E COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF
SUCH ACT.
In addition, this Warrant and the Shares to be issued upon the
exercise hereof shall bear any legends required by the securities laws of any
applicable states.
(b) TRANSFERABILITY AND NEGOTIABILITY OF WARRANT. This Warrant may
not be transferred or assigned in whole or in part without compliance with
all applicable federal and state securities laws by the transferor and the
transferee (including, if the transfer is being made other than in a
transaction registered under the Securities Act or exempt from registration
under Rule 144 under the Securities Act, the delivery of investment
representation letters and, if the transfer is being made other than in a
transaction registered under the Securities Act, the delivery of legal
opinions satisfactory to the Company, if requested by the Company) and unless
the transfer is to a transferee or assignee who the Company does not
reasonably consider to be an actual or potential competitor of the Company.
Subject to the provisions of this Warrant with respect to compliance with the
Securities Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers
of this Warrant on its books, but the Company may treat the registered holder
of this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
(c) DISPOSITION OF SHARES. With respect to any offer, sale,
transfer or other disposition of any Shares acquired pursuant to the exercise
of this Warrant prior to registration of such Shares, the Holder and each
subsequent holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of legal counsel for such holder, reasonably satisfactory to
the Company and its legal counsel, if requested by the Company, to the effect
that such offer, sale or other disposition may be effected without
registration or qualification (under the Act or any other federal or state
securities laws) of such Shares and indicating whether or not under the Act,
certificates for such Shares to be sold or otherwise disposed of require any
restrictive legend as to the applicable restrictions on transferability in
order to insure compliance with the Securities Act. Promptly upon receiving
such written notice and reasonably satisfactory opinion, if so requested, the
Company, as promptly as practicable, shall notify such holder that such
holder may sell or otherwise dispose of such Shares, all in accordance with
the terms of the notice delivered to the Company. Each certificate
representing the Shares thus transferred (except a transfer pursuant to Rule
144(k)) shall bear a restrictive legend as to the applicable restrictions on
transferability in order to insure compliance with the Act, unless in the
aforesaid opinion of legal counsel for the holder, such legend is not
required in order to insure compliance with the Securities Act. The Company
may issue stop transfer instructions to its transfer agent in connection with
such restrictions.
7. RIGHTS OF STOCKHOLDERS. The Holder shall not be entitled to
vote or receive dividends or be deemed the holder of Shares or any other
securities of the Company which may at any time be issuable on the exercise
of this Warrant for any purpose, nor shall anything contained herein be
construed to confer upon the
4
Holder, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised
and the shares issuable upon exercise hereof shall have become deliverable,
as provided herein.
8. NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or five (5) days after mailed by first-class registered or
certified mail, postage prepaid, at such address as may have been furnished
to the Company or the Holder, as the case may be, in writing by the Company
or such holder from time to time.
9. WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
10. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
its principles regarding conflicts of law.
11. EXPIRATION. The right to exercise this Warrant shall expire at 5:00
P.M., Pacific Standard Time, on June 30, 2002, if not terminated earlier
pursuant to any other provision of this Warrant.
Dated: __________, 1997
HEALTHEON CORPORATION
By: /s/ Xxxxx Xxxxxxx, M.D.
-----------------------------------
Xxxxx Xxxxxxx, M.D.
President
5
EXHIBIT A
NOTICE OF EXERCISE
TO: HEALTHEON CORPORATION
1. The undersigned Holder of the attached original, executed Series B
Preferred Stock Purchase Warrant (the "Warrant") hereby elects to exercise
its purchase right under such Warrant with respect to _____________________
shares of Series B Preferred Stock of Healtheon Corporation (the "Company").
2. The undersigned Holder elects to exercise the Warrant for such shares
(the "Exercise Shares") in the following manner:
[ ] by the enclosed check drawn on a United States bank and for
United States funds made payable to the Company in the amount of $___________;
[ ] by wire transfer of United States funds to the account of the
Company in the amount of which $____________, transfer has been made before
or simultaneously with the delivery of this Notice pursuant to the
instructions of the Company;
[ ] by cancellation of indebtedness of the Company in the amount
of $______________;
[ ] by net issue exercise pursuant to Section 2(c) of the Warrant;
[ ] by the combination of the foregoing indicated above or on the
attached sheet.
3. Please issue a stock certificate or certificates representing the
appropriate number of shares in the name of the undersigned or in such other
names as is specified below:
Name:
-----------------------------------------
Address:
-----------------------------------------
Tax Ident. No.:
------------------------------------
HOLDER:
By:
-------------------------------
Date:
-------------------------------
